{"id":72152,"date":"2019-07-08T13:02:52","date_gmt":"2019-07-08T13:02:52","guid":{"rendered":"https:\/\/www.templewealth.co.uk\/?p=72152"},"modified":"2019-07-08T13:02:53","modified_gmt":"2019-07-08T13:02:53","slug":"should-i-buy-or-should-i-rent","status":"publish","type":"post","link":"https:\/\/www.templewealth.co.uk\/should-i-buy-or-should-i-rent\/","title":{"rendered":"Should I buy or should I rent?"},"content":{"rendered":"\n<p>The UK has one of the highest home owning percentage rates in\nthe world. No matter how many&nbsp;times we experience boom or bust, the\nBritish like the idea of buying their own home.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"681\" src=\"https:\/\/www.templewealth.co.uk\/wp-content\/uploads\/2019\/07\/Welcome-to-our-home-1024x681.jpg\" alt=\"\" class=\"wp-image-72156\" \/><\/figure>\n\n\n\n<p>Part of the attraction is not just financial, but the sentiment\nof owning your own home, not worrying about having unreputable landlords, and\nbeing able to paint your walls whatever colour you want.<\/p>\n\n\n\n<!--more-->\n\n\n\n<p>Owning a home does bring more responsibility. But unless we are\nfrequently moving around the country, most people would buy if given the\nopportunity.<\/p>\n\n\n\n<p>Yet, for first time buyers, the&nbsp;ratio of house prices to earnings&nbsp;means that it is very difficult\nto buy \u2013 unless you can borrow from The Bank of Mum and Dad or be helped by the\nUK State.<\/p>\n\n\n\n<p>So, is it really worth the effort, or are we&nbsp;better off renting? Does our sentimental attraction to buying our own castle make sense?<\/p>\n\n\n\n<p>Let\u2019s first consider the advantage of buying a property&#8230;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>The end is in sight<\/strong><strong><\/strong><\/h4>\n\n\n\n<p>A mortgage may last for 25 or 30 years, but there will\neventually be an end to the mortgage payments, which means the hope of being\nable to live rent-free for your remaining years.<\/p>\n\n\n\n<p>In this way, paying off a mortgage is similar to saving for a\npension. If market rent is \u00a3800 a month, then finally paying off your mortgage\nwill be the equivalent of saving that cost of renting.<\/p>\n\n\n\n<p>With rising life expectancy, people are living longer.\nTherefore, the benefit of paying off your mortgage is increasing, too. The old\nsaying that \u2018rent is dead money\u2019 is true, of course, it depends how old you\nare, and how long you imagine you may live. If you are 40-years old, getting a\n30-year mortgage may not seem to give much benefit. But, if you live to 90\nyears, that would still be 20 years of rent free accommodation! Rents also rise\nwith inflation; often in the UK they rise faster than inflation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What about fluctuating\ninterest rates?<\/strong><\/h4>\n\n\n\n<p>Interest rates are currently exceptionally low. The most likely\nscenario is for rates to increase to 5% in the medium to long term, though it\nis not a foregone conclusion \u2013 Japan has had pretty much zero interest rates\nfor over a decade.<\/p>\n\n\n\n<p>Clearly, affordability is being helped by these record low\nrates. When buying however you need to budget for rates of 5%, and bear in mind\nthat rates have risen to over 10% in living memory.<\/p>\n\n\n\n<p class=\"has-background has-very-light-gray-background-color\">We encourage you to experiment with a&nbsp;mortgage repayment calculator to\nsee how the costs would vary with higher rates.<\/p>\n\n\n\n<p>It may seem the prospect of base rates jumping from 0.25% to 5%\nwould dramatically increase the cost of mortgages, but many lenders have not\npassed on the full base rate cuts onto consumers. If base rates rise to 5%, the\nactual mortgage payment you pay is unlikely to go up as much.<\/p>\n\n\n\n<p>As a rule of thumb, look at the cost of the longest fixed rate\nmortgage and not the variable mortgages.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Housing as investment<\/strong><strong><\/strong><\/h4>\n\n\n\n<p>There are two types of house buyers. One type buys a house to\nlive in rather than rent. The other type&nbsp;invests\nin property&nbsp;\u2013 usually via buy-to-let \u2013 hoping\nfor an equity gain.<\/p>\n\n\n\n<p>The first type, the average householder, is less affected by\nfluctuations in house prices. The key thing is the cost of mortgage payments\nand the other bills.<\/p>\n\n\n\n<p>In contrast, the buy-to-let investor is much more concerned with\ngaining equity in addition to income. And that requires rising prices.<\/p>\n\n\n\n<p>Forecasting UK house prices is a tricky business. The\nprofessionals often get it wrong, and some have actually given up trying to\nmake house price predictions.<\/p>\n\n\n\n<ul><li>On the one hand, house price to earnings\nratios are&nbsp;very high&nbsp;compared to previous decades and also compared to other\ncountries.<\/li><li>On the other hand, the UK has a&nbsp;shortage of housing&nbsp;that is\nunlikely to be solved anytime soon. This shortage of housing compared to the\nnumber of households means property could continue to be attractive for the\nmedium to long term.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h4>\n\n\n\n<p>It is worth looking at your local area and considering how much you pay to rent versus how much mortgage payments would be (assuming a good fixed rate mortgage). <\/p>\n\n\n\n<p>Mortgage rates are so competitive at the moment and sourcing a good Independent Mortgage broker, like ours, will go an extraordinarily long way in obtaining the one that\u2019s right for you.<\/p>\n\n\n\n<div class=\"wp-block-media-text alignwide has-very-dark-gray-background-color\"><figure class=\"wp-block-media-text__media\"><img loading=\"lazy\" decoding=\"async\" width=\"479\" height=\"479\" src=\"https:\/\/www.templewealth.co.uk\/wp-content\/uploads\/2019\/07\/Cy-Cotterill-Profile.jpeg\" alt=\"\" class=\"wp-image-72158\" \/><\/figure><div class=\"wp-block-media-text__content\">\n<p style=\"color:#9f9162\" class=\"has-text-color has-background has-very-dark-gray-background-color\">\n\nFor more information on mortgages contact Cy Cotterill, one of our independent mortgage advisers at Temple Mortgages on 01305 213150\n\n<\/p>\n<\/div><\/div>\n\n\n\n<p style=\"text-align:center\"><strong>The Financial Conduct Authority does not regulate Buy to let\nmortgages. Your home maybe repossessed if you do not keep up repayment on your\nmortgage.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK has one of the highest home owning percentage rates in the world. No matter how many&nbsp;times we experience boom or bust, the British like the idea of buying their own home. Part of the attraction is not just financial, but the sentiment of owning your own home, not worrying about having unreputable landlords, [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[40],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Should I buy or should I rent? - Temple Wealth<\/title>\n<meta name=\"description\" content=\"The UK has one of the highest home owning percentage rates in the world. 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